Manchester City Reportedly Found Guilty of Breaching UEFA's Financial Fair Play

Manchester City and Paris Saint-Germain are among the first batch of clubs to breach UEFA's financial fair play guidelines.

Both teams have been offered settlements by the governing body. Sky Sports suggests this punishment "could range from a reprimand to a fine up to restrictions on the squad for European competition next season," or that clubs may choose to appeal in risk of further discipline.

City were "confident" of passing this year's inspection, per Ian Ladyman of the Daily Mail, but they were aware of UEFA's scepticism toward "the manner in which the club increased some of their income streams over the last two years."

Ladyman provides further details on an intricate matter:

At the heart of City’s anxiety recently has been UEFA’s investigation in to City's unusual decision to sell £24.5m worth of player image rights to an external company. That has never been done before by a leading English club and the interest in that has only been increased by the fact City have declined to reveal who exactly that company is.

It is also said City's decision to raise "£22.45m from selling their 'intellectual property rights' to outside parties" caught UEFA's attention. Although the club is likely to accept a fine and slap on the wrist heading into next year's tougher regulations, such a penalty has the potential to harm the club's image.

Both City and PSG have spent massively across past seasons. The former team's expenditure sits at £91,777,840 this season, £15,532,000 last year and £57,318,800 in 2011, according to TransferMarkt.com.

Although an attempt to lessen spending appeared last year, the signing of players such as Alvaro Negredo, Fernandinho, Jesus Navas and StevanJovetic could haunt City when this year's accounts are due.

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For comparison, PSG's transfer expenditure was £96,272,000 this season, £129,533,684 in 2012 and £85,096,000 the year before. Such spending falls into line with the "financial doping" Michel Platini wishes to eradicate from the game, per Richard Conway of BBC Sport.

Only clubs taking part in the Champions League or Europa League face examination. Losses can total £37 million during each of the 2011-12, 12-13 and 13-14 seasons, while the number lessens to £25 million the year after. It will continue to drop until 2018, ensuring restrictions are tougher to meet, per Conway.

UEFA is keen to investigate sponsorship deals held by City and PSG. Ladyman claims officials are "looking at the structure and market value" of the English club's decade-long sponsorship with Etihad Airways, while PSG face similar scrutiny after Platini confirmed their "financial model is distinctive and atypical."

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Sky Sports confirmed "it is not known what settlements each individual club has been offered," but that UEFA could make an announcement on Friday. Pedro Pinto, chief of press for UEFA, revealed Platini hasn't indicated European suspensions should be ruled out:

Michel Platini clarifies he never confirmed there would be no exclusions as a result of Financial Fair Play process.Independent body decides

Ladyman suggests the "likelihood" is that both clubs will receive a fine. City's attempts to reduce costs could see them favourably treated, but there's no denying a public punishment is likely to be highly embarrassing for two clubs that have strived to impress on the European stage.

A sustainable, success-filled model is needed if both teams are to reach their potential. Sky Sports believes "there are fewer than 20 clubs" facing sanctions, indicating other high-profile clubs could soon find themselves in the spotlight.

City and PSG are two of the biggest, most lavish spenders in the game, an output that may change if they are significantly reprimanded by UEFA.